Are You Using a Trusted, Australian-Based Auditor?
SMSF non-compliance can be very costly: in addition to making directions for rectification, the commissioner can impose administrative or criminal penalties, disqualify a trustee, wind up an SMSF or freeze the assets of an SMSF.
Each year the ATO will set out an audit report with criteria from sections and regulations that auditors are expected to review.
The ATO has said they would be concerned if they saw “SMSF auditors not necessarily providing their skill and judgement, just relying on the automated process to do the finance checks, and then not actually turning their mind to the regulatory issues.”
Currently under scrutiny is the reliability of electronic feeds. Automation can lead to complacency and even if auditors have high tech systems and software, they must always ensure they remain sceptical and independent and apply their judgement and not simply trust the software.
For example, where auditors are provided with electronic signatures, how are they to know that the trustee really signed it? Accountants and auditors alike need to ask “Where is this data feed coming from, how reliable is it and what systems can we set in place to ensure reliability.” A technologically prudent auditor will cross-check information and ensure the integrity of direct feeds.
Grant Abbott, the author of the latest SMSF best selling book “The Guru’s Guide to SMSFs”, says that although automation has improved efficiency in every day tasks, we should not be fooled by SMSF automation. And that “the penalties for making a mistake are at best a fine and at worst being caught under a strict liability legal action for recovery of all losses, damages and legal costs.” He also states that certain SMSF documents should not be automated, as technology cannot replace the accuracy, decision making and advice that an auditor brings. These documents include include:
Investment Strategy
Statement of Advice
SMSF Estate Planning
SMSF Audit.
Technology needs to be used to drive efficiency, but cannot entirely replace the audit process. A quality auditor’s judgement is still required. Although technology may have reduced the tedious tasks with SMSF audits and simplified the process, it still fails to replace the experience and professionalism that an SMSF auditor can bring.
Ensure your Practice takes the high road by using a trusted, Australian-based auditor.
For more information, contact Saul SMSF.
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